This week's key agenda: July 9th "Reciprocal Tariff" deadline

From July 7 to July 13, a summary of major financial events, all in Beijing time:

This week's key focus: The end of the suspension period for the U.S. so-called "reciprocal tariffs," the 17th BRICS leaders' meeting, the Federal Reserve's release of the monetary policy meeting minutes, and China's release of June CPI, PPI, and social financing data.

In addition, the IEA will release its monthly report, several Eurozone countries will announce the final CPI for June, and countries such as the UK, South Korea, Thailand, and New Zealand will announce interest rate decisions.

U.S. "reciprocal tariffs" suspension period ends, Trump: New tariffs will start on August 1

According to Xinhua News Agency, U.S. President Trump announced on April 2 the imposition of so-called "reciprocal tariffs," which subsequently triggered turmoil in global markets. Under pressure from multiple parties, the Trump administration announced on April 9 a 90-day suspension of high "reciprocal tariffs" on some trading partners. However, it maintained a "baseline tariff" of 10% and threatened U.S. trading partners to complete negotiations with the U.S. by July 8.

As the deadline approaches, according to Global Times report on the 5th, President Trump stated that the U.S. government will notify countries that have not reached trade agreements of new tariff rates starting July 4, with rates ranging from 10% to 70%, and plans to officially implement them from August 1. This upper limit of 70% is significantly higher than the 50% announced in April, and the market is generally concerned that this move will exacerbate inflation risks in the U.S. economy and may trigger a new round of asset sell-offs.

On Friday, July 5, Trump confirmed to the media aboard Air Force One that he had signed tariff letters to be sent to "about 12" countries and planned to send them out on Monday (July 8). He described these letters as a "take it or leave it" ultimatum, stating:

“(Compared to the previously complex negotiations) the letters are better... and much easier.”

Behind this strategic shift is the repeated setbacks in negotiations with major trading partners. Media reports indicate that after repeated failures in negotiations with major trading partners such as Japan and the EU, Trump has become frustrated with the process. The prolonged traditional trade negotiation model faces significant challenges under the accelerated timetable set by the White House.

So far, only a few countries have reached agreements with the U.S. The UK reached an agreement in May to maintain a 10% baseline tariff and received exemptions in key areas such as automobiles; Vietnam successfully reduced the tariffs on some of its goods from the threatened 46% to 20%Shifting from complex negotiations to unilateral ultimatums, this aggressive trade strategy by the United States has brought significant uncertainty to the global economy. As the July 9 deadline approaches, the market is holding its breath, paying close attention to the final destination of these 12 mysterious letters and the chain reactions they will trigger.

BRICS Summit to be Held in Rio de Janeiro, Brazil

According to CCTV News, the 17th meeting of BRICS leaders is set to take place from July 6 to 7 in Rio de Janeiro, Brazil. The theme of this meeting is "Strengthening Cooperation among Global South Countries to Promote More Inclusive and Sustainable Governance."

Many experts believe that this leaders' meeting will be the first summit held after new members Indonesia and 10 partner countries joined BRICS, with multiple emerging markets, developing countries, and international and regional organizations invited to participate, making it more representative. This will further promote unity and cooperation among emerging market countries and developing nations, facilitate equal and orderly global multipolarity, and inclusive economic globalization, showcasing a stronger "Southern Power" to the world.

Experts believe that as the "first echelon" of the Global South, the development and expansion of the BRICS mechanism will help strengthen cooperation among Global South countries. Marcos Pires, director of the Institute of Economics and International Studies at São Paulo State University in Brazil, stated that the expanded "Big BRICS Cooperation" provides a broader strategic dialogue platform for Global South countries, helping to tighten political and economic ties among nations and offering a platform for Global South countries to participate in global governance, defend development rights, and seek more voice.

Federal Reserve to Release Minutes of Monetary Policy Meeting

On July 10, next Thursday, the Federal Reserve will release the minutes of its monetary policy meeting.

Last month, the Federal Reserve continued to hold steady, pausing interest rate cuts for the fourth consecutive meeting. The non-farm payroll data released on Thursday showed strong resilience in the U.S. job market, with non-farm employment increasing by 147,000 in June, surpassing the market's general expectation of an increase of 106,000, and the unemployment rate dropping from 4.24% to 4.12%.

Nick Timiraos, a senior reporter known as the "New Federal Reserve Correspondent," believes that Federal Reserve officials previously mentioned the robustness of labor market data to justify their cautious approach to interest rate decisions. The recently released U.S. non-farm employment report may lead them to extend this policy observation period.

As Powell himself stated, a "robust labor market" gives the Federal Reserve more time to observe the impacts of a series of policy changes implemented this year. On Tuesday, Powell stated at the central bank forum held by the European Central Bank that Fed officials are "closely monitoring the labor market," and although they see a trend of "gradual cooling," "we have not yet seen any unexpected signs of weakness."

Interest rate swap data shows that traders believe the likelihood of a rate cut at the July 29-30 meeting has dropped to nearly zero, while the probability of a rate cut in September is about 75%. The market still expects a 50 basis point rate cut within the year.

China Releases June CPI and PPI Data

On July 9, China released the June CPI and PPI data.

Last month's data showed that China's May CPI fell by 0.1% year-on-year. Among them, urban prices remained stable, while rural prices fell by 0.4%; food prices decreased by 0.4%, and non-food prices remained stable; consumer goods prices dropped by 0.5%, while service prices rose by 0.5%. From January to May, the average national consumer price index decreased by 0.1% compared to the same period last year. In May, the national consumer price index fell by 0.2% month-on-month.

The PPI decreased by 3.3% year-on-year and fell by 0.4% month-on-month; the purchasing prices for industrial producers decreased by 3.6% year-on-year and fell by 0.6% month-on-month. From January to May, the average producer prices for industrial producers and purchasing prices both decreased by 2.6% compared to the same period last year.

Guoxin Securities analyzed that based on the performance of high-frequency price indicators, it is expected that the June CPI will return to positive growth year-on-year, with a month-on-month decline continuing at 0.2%, and the year-on-year growth rate of PPI may remain the same as last month.

China Releases June Social Financing Data

On July 9-15, China released the June social financing data.

Last month's data showed that the incremental scale of social financing in May was 2.29 trillion yuan, an increase of 224.7 billion yuan year-on-year, with new RMB loans of 620 billion yuan, and the M2-M1 spread narrowed.

On May 7 this year, the central bank announced a package of financial support measures, including reserve requirement ratio cuts, interest rate reductions, and the optimization and creation of structural monetary policy tools. Experts indicated that these measures are very substantial, and it takes time for monetary policy to show effects; various policies have gradually taken effect.

IEA Releases Monthly Report

On July 11, the IEA released its monthly oil market report.

According to previous mentions by Wall Street Watch, OPEC+ will agree to increase oil production by about 550,000 barrels per day in August at Saturday's meeting, higher than the 411,000 barrels per day in May, June, and July. OPEC+ representatives stated that OPEC+ will consider increasing production by another 548,000 barrels per day at the next meeting.

Against the backdrop of easing tensions in the Middle East, international oil prices have returned to pre-conflict levels, with WTI crude oil maintaining at $67 per barrel. The IEA stated in last month's report that as long as there are no severe interruptions in Middle Eastern oil supply, global oil market supply will remain sufficient by 2025. Additionally, the oversupply situation may persist for the remainder of this decade.

Eurozone Countries Release June CPI Final Values

On July 11, Germany and France released the final year-on-year CPI values for June.

Last month's preliminary values showed that Germany's June inflation rate unexpectedly fell to 2%, reaching the European Central Bank's target level for the first time in nearly a year, which was better than market expectations. However, compared to price increase pressures, many decision-makers are more concerned that economic weakness may drag down inflation.

Market expectations indicate that the European Central Bank may maintain the current interest rate level at the next monetary policy meeting later this month. With the inflation rate reaching the target level, economists predict that there may be another interest rate cut within this year

The UK, South Korea, New Zealand and other countries announce interest rate decisions

On July 9th, the Bank of England released the minutes of the monetary policy meeting.

Last month, the Bank of England announced that it would keep the policy rate unchanged at 4.25%, in line with expectations. However, the degree of disagreement in the voting results exceeded market expectations, with 6 votes in favor of maintaining the rate and 3 votes in favor of a 25 basis point cut. The minutes also released dovish signals. Traders have fully priced in two 25 basis point cuts within 2025.

In addition, on Wednesday, the Reserve Bank of New Zealand announced its interest rate decision, and on Thursday, the Bank of Korea announced its interest rate decision